Coronavirus impact on housing market:London house price growth hit three-year high before property market shutdown
The Land Registry figures track completed sales in March, ahead of transactions slowing after the full lockdown was imposed on 23 March
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London house prices surged at their fastest rate for more than three years in March despite the near total closure of the property market at the end of month.
The average cost of a home in the capital jumped 1.2 per cent to £485,527 in the month, increasing the annual rate to 4.7 per cent, according to latest data from the Land Registry.
London house prices have not risen as fast since December 2016 when the market was starting to slow down after the shock of the Brexit referendum result.
The increase leaves London prices just a fraction below the all-time high of £488,527 in July 2017.
Some boroughs saw remarkable double digit increase in prices, although the Land Registry cautioned that reduced numbers of transaction meant that monthly figures could be skewed by a small number of very high value deals.
Growth followed by market slowdown
The biggest increase of all was seen in Hackney where the average price surged 15.1 per cent followed by Kensington & Chelsea on 14.6 per cent, Westminster on 13.5 per cent, and Barking & Dagenham, where they rose 11.2 per cent.
Transactions slowed to a trickle during April after the full lockdown was imposed on 23 March, which closed all estate agency branches and made physical viewings impossible.
In April, estate agent Knight Frank predicted house prices would drop three per cent, assuming lockdown was lifted by the end of this month.
Last week, the forecast was downgraded to predict a fall seven per cent compared to last year, after the revised report said much of the decline in prices had already taken place between March and May, so the reopening of the market after seven weeks on pause would not impact the forecast.
However, the lifting of restrictions last week has led to a surge in viewings and offers that is likely to stop prices falling sharply for now.
Marc von Grundherr, director of London lettings and estate agent, Benham and Reeves, said: “The strong growth seen at the start of the year and annually has provided a strong foundation on which the market can bounce back and fears of a market crash should now move to the back of our minds. Although, only time will tell, of course.”